Dechert London’s International Trade and EU Law Team with the support of the Russo-British Chamber of Commerce recently hosted a roundtable discussion on the sanctions against Russia.
Dechert’s International Trade team and its Moscow Office, representatives from the Foreign and Commonwealth Office, the Department of International Trade, the British Embassy in Moscow, Russo-British Chamber of Commerce (RBCC) and a range of UK and international businesses discussed the effects of and the future prospects for EU and US sanctions on Russia, the experience of companies operating in Russia with sanctions, and the opportunities available for future business in Russia while companies there remain under sanctions.
The discussion took place under Chatham House rules, so comments cannot be ascribed. However we drew the following key conclusions from the discussions:
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The sanctions had the biggest impact on Russia in the first year they were implemented, including on UK businesses operating in Russia. In the first year, Russia suffered massive capital flight. Over time the Russian government and many businesses have adapted to bring their activities into compliance with international sanctions;
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Russia is open for business: the sanctions, quite intentionally, do not affect every sector, nor every activity in the sectors that they do affect; they are targeted and business is encouraged to invest but must takt sanctions into account in operating trade.
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The sanctions are complex: the sanctions are different from other EU sanctions and their complexity has caused confusion amongst businesses operating with Russian parties. Companies operating in Russia or with Russian parties should be sure of their ground legally and establish robust processes for ensuring compliance;
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The sanctions are here to stay: We should not expect consensus on sanctions to fall apart. Measures continue to be supported in the EU and despite initial indication that a new US administration might lead to US ending its restrictions, the US has recently strengthened both the legislative footing and the scope of its measures on Russia, particularly as this relates to the energy sector.
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The recent US measures have introduced additional elements: the Countering America's Adversaries Through Sanctions Act (CAATSA) not only codified US sanctions against Russian parties but also added further elements. The precise impact of these measures on EU companies is not yet clear.
